WINOOSKI — Gov. Peter Shumlin signed a wide-ranging economic development bill into law Tuesday with bipartisan support.

He touted it as a jobs bill that will help the state’s economy by providing additional funds and tools to support high-tech startups and encourage young Vermonters to work here.

Shumlin cited Vermont’s unemployment rate, second-lowest in the nation, but said the state faces economic challenges.

A recent report from the Office of Advocacy for the U.S. Small Business Administration found that Vermont’s gross state product increased by 1.2 percent in 2012, less than half of the national average of 2.5 percent.

And the state is bracing for the possible sale of IBM’s Essex chip-making plant, leaving the fate of 4,000 jobs in question.

With its small tax base, the state cannot afford to go head to head with other states in a battle over tax incentives. Instead, Shumlin said the state is looking to make targeted investments to attract and retain companies, and help students obtain college degrees.

“We’ve got a lot of good news to report and we also have some challenges,” Shumlin said at the bill signing at My Web Grocer in Winooski, which provides digital grocery services.

“This bill is really a comprehensive jobs bill that will help us take the state that has the second-lowest unemployment rate in America, something that we should celebrate ... and ensure that we continue to grow jobs and economic opportunity,” the governor said. “We cannot take our eye off the ball.”

The law adds $500,000 to $1 million in federal funding available to the Vermont Economic Development Authority’s Vermont Entrepreneurial Lending Program, which creates a loan-loss reserve to reduce the state’s risk of lending to startup companies.

Shumlin said the additional funding can help launch a new generation of high-tech companies, particularly companies that “have a good idea but they can’t get credit from traditional banks.”

“What this money really does is to shore up our loan-loss reserves … so we can loan more money to startups, like My Web Grocer was not so long ago,” Shumlin said.

The governor also touted the Vermont Enterprise Incentive Fund, which was included in the budget, but designed to work alongside the bill signed Tuesday. It provides Shumlin with up to $4.5 million in supplemental incentives to use in “unforeseen or extraordinary circumstances” to attract or retain companies.

Shumlin will have to receive approval from the Emergency Board, which includes the heads of the Legislature’s money committees, before tapping the fund.

Some, including Greater Burlington Industrial Corp., say that most, if not all of the fund, should be used to help retain IBM or any entity that may end up purchasing the Vermont plant.

Shumlin said Tuesday his administration has made no plans on how it will use the funding. He said he hopes to use the funds to retain chip-making in Essex as well as attract new companies, noting they are “not mutually exclusive.”

“We haven’t established specific criteria,” Shumlin said. “What we’re doing is obviously developing criteria but also remaining flexible. What I feel very strongly about the $4.5 million is, let’s maximize its potential to help fill the gap when we’re both trying to retain high tech and research and development jobs and when we’re trying to recruit them.”

Two companies are actively considering moving to the state, he said, but interested companies often receive more lucrative incentive packages elsewhere. The enterprise fund will help him sweeten Vermont’s offers, he said.

“I’m able to say, ‘You know, we might have the capacity to fill some of that gap,’” Shumlin said.

Jerry Tarrant, co-founder and chief operating officer of the 200-employee My Web Grocer, said he supports the state’s efforts to target investments and help foster more tech companies.

“When I think about a bill like this, I think about young kids graduating from Champlain College, UVM, some of those guys that have ideas,” Tarrant said. “They don’t need a lot of startup capital, but it’s really hard to get capital unless you’re kind of coming out of the blocks with some real venture backing.”

Tarrant praised state officials for being willing to take risks on behalf of the state’s economy.

“You’ve got to take chances to grow your economy, you’ve got to take chances to grow a business,” he said.

“I think what you do on something like this is, you do the best you can evaluating your investment,” Tarrant said. “Yeah, you’re going to have some successes and some failures. If you don’t go into that with your eyes wide open, then you’re looking at it the wrong way.”

Sen. Kevin Mullin, R-Rutland, chairman of the Senate Economic Development Committee, said he and other committee members decided at the end of the 2013 legislative session to seek an expansive bill.

“It wasn’t just going to be a token bill, it was going to be a bill that encompassed everything from education to housing to try to get government out of the way of entrepreneurship, to spur entrepreneurship and create access to capital,” he said.

He said some issues, including conflicting views about how to grow jobs while protecting the environment, were hashed out.

“We’re trying to figure out a way that we can do that jointly and I think we’re doing that,” he said.

Mullin praised Rep. Bill Botzow, D-Pownal, chairman of the House Economic Development Committee, for bipartisan cooperation on the bill.

“We don’t worry about petty things,” Mullin said. “We just worry about the end result and I think the end result on this bill is a very good one.”

Botzow, meanwhile, said he is most pleased with a provision that authorizes the state treasurer to invest up to 10 percent of the state’s average cash balance of state funds back into Vermont. It will boost capital and encourage entrepreneurs, he said.

“I know we’ve done good work when I hear back from people very, very quickly, and I’ve already gotten emails and messages,” Botzow said.